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German Business Sentiment Deteriorates | WTI Jumps on Retaliatory Tariff Threats

Published August 26, 2019
  • Economic surveys have demonstrated that German business sentiment has deteriorated more than expected in August after hitting its lowest level since November 2012. This is a further sign that Europe’s largest economy is sliding towards a recession. The Ifo Institute for Research stated its Business Climate Index fell to 94.3 from an upwardly revised 95.8 in July.
  • President Trump has stated that China called him and asked to restart trade talks. This statement came after China’s top trade negotiator said they were willing to solve the trade problem “through consultation and cooperation with a calm attitude”. The market reaction to Trump’s comments this morning has been positive after the Asian trading session saw heavy selling in the wake of the president’s announcements on Friday.
  • Oil prices were down on Monday in Asia after China announced late last week an additional 5% tariff on $75 billion of US products, including crude. In retaliation, President Trump ordered US companies to consider closing operations in China and make products in the United States instead. US Crude Oil WTI Futures have jumped over 3.0% in early trading to $55.01.

To the Clients of EncoreFX:

 

It is with much regret that we inform you that EncoreFX’s (the “Company”) offices are suspending trading effective immediately.

This suspension will give the Company time to consider its restructuring alternatives. The restructuring has become necessary as a number of customers to whom the Company granted credit have defaulted on their obligations to the Company due mainly, we believe, to the rapid changes in the FX market caused by the coronavirus pandemic.

 

In order to provide stakeholders with transparency, the Company has filed an assignment in bankruptcy pursuant to Section 49(1) of the Bankruptcy and Insolvency Act (Canada) (the “BIA”) with respect to its Canadian operations and has assigned its Australian and New Zealand subsidiaries in Voluntary Administration in Australia and New Zealand. 

 

Ernst & Young has been appointed as the licensed insolvency trustee (the “Trustee”) in Canada and as the Administrator in Australia. 

 

Once the Trustee, working with the Company, has determined the best options for the Company and its stakeholders it will share that information with you. Information pertaining to the bankruptcy of EncoreFX will be available, in due course, on the Trustee’s website at: www.ey.com/ca/encorefx.